Have you heard about the lawsuit filed against famous chef José Andrés and his Mercado Little Spain restaurant in New York? Apparently, Andrés is being accused of purposely underpaying his staff over an extended amount of time. He denies any wrongdoing. Rather, he blames a software glitch that underpaid some employees and overpaid others.
Unfortunately, the back-and-forth of this lawsuit has been ugly at times. Plaintiffs and their attorneys claim Andrés and his restaurant intentionally underpaid workers. They cite the fact that it went on for so long as evidence of it being purposeful. Andrés continues to blame the software glitch and has offered to make double restitution. He has even said those who were overpaid can keep the extra money.
The point of this post is not to decide who is right or wrong. Rather, it is to discuss the importance of good payroll software in the restaurant industry. In order to do, we assume that a software glitch did cause the problems at Mercado Little Spain.
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Restaurant Payroll Is Complicated
The first thing to understand is that restaurant payroll is complicated throughout the U.S. That’s why Dallas-based BenefitMall has developed a specialized restaurant payroll software solution. In the case of Mercado Little Spain however, things are exacerbated by convoluted laws in New York State.
New York has different minimum wage requirements depending on business type and where a business is located. A restaurant owner might have to pay one wage in New York City but another up in Westchester County. Then there are tips to consider. This is all before considering federal labor laws.
Even with perfectly running software, it is easy to get things wrong in the restaurant industry. Food service is one of the most complicated industries for payroll purposes. As such, it is critical that restaurants be able to depend on their payroll software to do things right.
Penalties Can Be Significant
The Mercado Little Spain case demonstrates that things going wrong can result in litigation. This particular case is still too new to attempt to figure out any sort of outcome, but there have been other cases in which employers found guilty of purposely underpaying workers faced stiff penalties.
Both federal and state governments take payroll violations very seriously. They do not look kindly on employers who don’t pay their workers every dime. They are equally harsh when employers do not pay their payroll taxes or file their paperwork late.
The point is that being found in violation of labor laws is a big deal. Furthermore, it would be a shame for a restaurant to face civil litigation and potentially huge fines just because of a software glitch. This potential for the litigation is yet another reason to be very careful about one’s payroll software.
Employers Are Ultimately Responsible
BenefitMall says one of the best ways to reduce the risks associated with complex payroll is to outsource to a company with a solid reputation and a long history. But they are quick to remind that employers are ultimately responsible for making sure all of their payroll ducks are in a row.
A reputable payroll provider will back up its service with a rock-solid software platform and plenty of technical and professional support. That service provider will work with the restaurant owner to ensure that payroll is handled in accordance with the law at all times. This is the way things should be. If you own a restaurant, don’t take any chances by continuing to do things in the house with payroll software you cannot necessarily trust.